About Trusts

Santa Rosa Estate Planning Attorney

There are such enormous misconceptions about trusts.  Trusts do not automatically avoid probate. They also do not guarantee an estate tax free estate. First of all, trusts need to be funded to avoid probate. This means assets have to be transferred to the trust. Transfer documents, such as trust transfer deeds, change of ownership forms for non tax-deferred investments and bank accounts, and assignments of partnership and limited liability companies to the trust, need to be created.  Change of beneficiary forms also need to be completed and submitted.  

These are all part of the estate planning process.  When any aspect of the planning process is not properly executed, serious problems can result for your heirs.  It is vital that you have the assistance of a Santa Rosa estate planning attorney to assist you and ensure that your documents are correctly created and filed to avoid the frustration, loss of property or other difficulties for your heirs.

How do Trusts Work?

When trusts provide "tax planning", what this means in concrete terms is that when the first spouse dies, a tax exemption trust is created.  This is in addition to the survivor's trust.  It is these two trusts - the exemption trust and the survivor's trust - that provide a total of two exemptions from estate tax. Two exemptions are better than one exemption.  But it is not unlimited - there are specific legal restrictions. 

Trusts work best when they are properly serviced. A trust is not merely a product.  Trusts avoid probate because of successor trustees.  When a trust is established, the owners of the trust are typically named as the trustees.  The trustee holds the legal ownership of the assets.  If the owner becomes incapacitated or dies, the successor trustee steps in.  This allows the baton to get passed to the future generation without the need for court supervision.

The winding down aspect of a trust occurs during trust administration. The trust is the centerpiece of your estate plan, and the proper drafting of your trust is of ultimate concern.  It is crucial when planning your estate that you have legal counsel that can manage all aspects of your estate plan, and ensure that the tax implications are understood and addressed.  With over 15 years experience in estate planning, I, James Krupka, can advise you about how to proceed with your estate planning and how to best achieve the goals you have for your heirs.

Contact our Santa Rosa Estate Planning office today.